European shares fall on worries over Spanish banks

European stock markets had a shaky start on Friday as concern continued over Greece and Spain. Spain's main share index fell more than 2% before recovering, while shares in London fell by as much as 1%.

Confidence in European banks was undermined by ratings agency Moody's, which cut the credit ratings of 16 Spanish banks late on Thursday. It also cut the debt rating on Santander UK, a subsidiary of the Spanish banking giant.

However, shares in Santander reversed early losses to trade 3% higher, and Bankia shares jumped 9% following Thursday's 14% slump.

One Spanish man thought the downgrade was a good thing for the economy speaking in Spanish he said,

"the downgrade should have been done ages, also because Spain's banking system cannot guarantee the safety of savers money."

In response to worries over Spain some investors moved money into German bonds, which are seen as low-risk investments. That drove the yield on 10-year German bonds down to 1.399% today, a record low.

While over in Athens, there has been a downgrade of Greece's credit rating by Fitch which has gone from a B- to CCC over fears of a default.